State paying 6-figure pension to ex-teachers union lobbyist

— A former lobbyist for a powerful teachers union is reaping a $100,000-a-year state pension thanks to wide-ranging retirement legislation sponsored nearly six years ago by her former boss, House Speaker Michael Madigan, and his legislative allies.

The 2007 law let Gail Purkey, who worked at two state jobs in the 1980s, receive a state pension based mostly on her long career and six-figure salary with the Illinois Federation of Teachers, the Tribune has found.

Purkey, 58, stands to collect a total of about $3 million if she lives to age 78, according to a Tribune analysis. Payroll records show that her last state salary was $36,800 — just over a third of her current state pension.

"I followed what the law said," Purkey recalled in an interview, emphasizing that she had to pay heavily into the pension system to qualify.

Under the 2007 pension law, employees of a statewide labor organization who had previously worked in Illinois government were given a special six-month window to rejoin the taxpayer-supported pension plan for rank-and-file state workers.

Without the change, Purkey may not have collected a state pension. She did not work at the two state jobs long enough to be vested, and Purkey said she cashed out about $5,000 in contributions to the pension plan when she took a position with the union. The Illinois Federation of Teachers is a statewide organization whose membership includes the Chicago Teachers Union.

The chance to rejoin the state workers' fund years later had such lucrative long-term potential that Purkey paid more than $600,000 for the opportunity, including rolling in other retirement fund dollars and writing personal checks.

Two other lobbyists for the Illinois Federation of Teachers used a different provision in the same 2007 law to line up hefty teacher pensions by subbing in a classroom for one day each. Angry lawmakers scaled back those benefits after Tribune and WGN-TV disclosures last fall, and Gov. Pat Quinn signed the legislation into law in January.

Those changes won't affect Purkey, whose retirement benefits represent another example of how legislators for years have tinkered with the pension code in ways that helped individuals or scored political points, often undermining the financial health of the pension funds.

Quinn and state lawmakers now are in a partisan deadlock over how to save money in one of the nation's worst-funded state pension systems, where debt could hit $93 billion next year.

Purkey's state employment included a stint in the 1980s working for Madigan's legislative staff while the Chicago Democrat served as minority leader and first became speaker. She later worked at the Illinois Arts Council, a state agency chaired by Madigan's wife, Shirley.

She spent less than seven years in those jobs before leaving Illinois government in 1988 for a position with the union, according to state payroll and pension records. She would have needed eight years to be eligible for a pension.

But the 2007 law, sponsored in the House by Madigan and handled by one of his top lieutenants, changed that. Today, Purkey's credited service with the State Employees' Retirement System includes not only her time working for the state, but also more than two decades as a union lobbyist and spokeswoman — enough time to qualify for free health coverage as well.

Her retirement checks are based on an average of Purkey's four highest salaries during her last 10 years with the union, or about $195,000, according to the pension system.

Two years into her retirement, Purkey already has collected more than $200,000, records show. She is getting $101,909 this year, and her pension grows with an annual 3 percent compounded cost-of-living increase every January.

The reform Quinn signed in January blocked two of Purkey's colleagues — Steven Preckwinkle, the union's political director, and lobbyist David Piccioli, a former Madigan staffer — from counting toward a teacher pension any union service before they subbed in a classroom.

The 2007 legislation passed in the post-election veto session in the fall of 2006. Days earlier, Democratic Gov. Rod Blagojevich was re-elected, and Democratic legislative victories kept Madigan and then-Senate President Emil Jones in control of their chambers.

The Illinois Federation of Teachers had showered the Democratic trio with cash, dwarfing the money it sent to Republicans.

Blagojevich, who won the union's endorsement, got more than $515,000; Madigan, the state party chairman, and his rank-and-file candidates got about $567,000; Senate Democrats got roughly $388,000, according to an analysis by Kent Redfield, a campaign finance expert from the University of Illinois at Springfield.

Giving Purkey the chance to buy so many years' worth of union time is equivalent to "bending the system to benefit the people on the inside" and a "good gamble" for her given that life expectancies are increasing, Redfield said.

Republican Rep. David Leitch, a longtime banker from Peoria, said he opposed the measure because he is always leery of pension bills that emerge in a post-election veto session — a time when lame-duck lawmakers are freer to take controversial votes.

"Historically, that's where the most mischief has been played," said Leitch, one of only six House lawmakers to vote against the legislation. "Normally, my woofers and tweeters go off when I see a lame-duck pension bill."

Purkey said that she did not work on the bill when it passed the General Assembly, and that the option she eventually used to access the state pension system had been bandied about for years, including "pre-Blagojevich."

Asked why the bill passed when it did, she said, "I have no idea."

Madigan spokesman Steve Brown dismissed any connection between campaign contributions and the pension legislation, saying he doubted lawmakers voting on the bill had "any awareness" of the political donations.

After last fall's disclosures about Preckwinkle and Piccioli, Madigan said that he had not known they would qualify under the 2007 law, but that he also was "not surprised by anything in this building."

Brown also has said it is normal practice for the speaker to serve as lead sponsor of pension bills in the House to manage the flow of legislation on a complex topic. Further, Brown has said that Madigan was not the "chief architect" of the bill, and that then-Rep. Gary Hannig, D-Litchfield, tended to be the floor leader on financial matters. Hannig, who now works for Quinn, has said he did not remember how the bill came together.

Brown questioned how much detail Madigan would have had about potential beneficiaries of the legislation. Asked specifically if the speaker knew Purkey would benefit, Brown said, "I don't have any recollection of that."

In addition to Purkey, two other employees with the Illinois Federation of Teachers are participating in the state pension system under the same section of the law. They have not retired.

Once Purkey decided to take advantage of the pension perk, she had to shift money — $666,300 in all — into the state retirement fund in a series of transactions, then start paying into it while she worked at the union, according to interviews, emails and pension records. The money covered the employee and employer contributions that would have been required if she had been in the state fund all along, plus interest.

Purkey said she rolled over about $480,000 from her own retirement account, into which she and the teachers union both had paid. That purchased about 19 years of credit, according to Tim Blair, executive secretary of the pension system.

Among the other contributions from Purkey was $36,140 she paid for the nearly seven years she served in state government, Blair said.

"What did strike me as I looked at the numbers was HOW MUCH MONEY I contributed to participate" in the pension plan, Purkey wrote in an email to the Tribune. "Looking at that total really drove home to me the commitment I personally made to participate."

Purkey suggested it would be good if more people rejoined the pension system in the manner she did because the money they have to contribute — including back payments and interest — would "pay every dollar the actuaries said was required."

"I thought my participation was, in a very small, even microscopic way, a help to the system," Purkey wrote.

But what she paid in may not cover what she gets back. In less than seven years of retirement, Purkey's pension payouts would exceed the $666,300 she and the union contributed, records show.

Blair said requests from rank-and-file workers to buy time are not unusual, but the amount Purkey purchased is a rarity.

"Not often do you see that large amount of time authorized," Blair said. "It's unusual to have 19 years of time repaid with employee and employer contributions and interest. ... This is a really big number for us."